Nevada State Office of Energy Seeks Renewable Energy Proposals
The Nevada State Office of Energy (“NSOE”) announced on March 16, 2010, that is it has issued a Request for Proposals (“RFP”) for renewable energy projects under the $8M+ Revolving Loan Program. Projects must be no more than 60kW in size for solar PV and 20kW maximum for wind turbines and solar thermal. Loan terms will be less than 15 years and interest rates three percent or lower. Applicants may apply for a minimum of $200,000 and a maximum of $1,645,000, and must be able to enter a loan contract prior to June 30, although projects may begin after that date. It is the intent of the RFP to approve a minimum of five applications. The solicitation may close at any time upon determination by the Director of the Nevada State Office of Energy that a sufficient number of qualified applications have been received to satisfy the needs of the RFP. If the RFP fails to produce a sufficient number of eligible applicants the Director may consider granting loans exceeding the published maximum amount.*
Interested parties should go to http://energy.nv.gov/recovery/RevolvingLoan.htm or contact Robert Nellis, Energy Program Manager at (775) 687-1850 x7304 for more information.
*Request For Proposal No. 0001 for ARRA Revolving Loan Program For Renewable Energy Systems Release, dated March 15, 2010.
Optimizing Tax Benefits in Financing Renewable Energy Projects
Federal tax benefits, such as the Section 1603 Grant, investment tax credits and production tax credits, continue to be an important driver in financing renewable energy projects. Several of my colleagues will be discussing these tax benefits and other incentives related to project financing in a webinar hosted by Infocast on Wednesday, March 31, 2010 at 1:00 p.m. Eastern. Here is full description of the topics that will be discussed, the speakers and a link to the Infocast website for registration:
The section 1603 grant program created by the American Recovery and Reinvestment Act of 2009 recently entered its second year. Section 1603 has transformed the renewable energy industry from one in the doldrums to an industry revitalized. But what does the future hold for section 1603 and will recent legislative efforts to limit the grant program create a new uncertainty in renewable energy financing?
Unfortunately, section 1603 is set to expire at the end of 2010, except for projects that have commenced construction. Recently, the prospects for extending section 1603 were dimmed when Senator Charles E. Schumer (N.Y.), and three other Democratic senators, sponsored a bill that would place limitations on receipt of the grant. Developers, lenders, investors and their counsel all need to know whether and how they can fit under section 1603 and, if they can, how to optimize their deal structures, including the interface between the section 1603 grant and the Department of Energy Loan Guarantee Programs and any related NEPA compliance issues. Those who, for whatever reason, cannot qualify for section 1603 need to understand what comes next: PTCs, ITCs, or maybe some variation on 1603, and how those transactions should be designed.
Please join Infocast and Stoel Rives for a 90-minute webinar and panel discussion on project financing of renewable energy projects to maximize the benefit of tax and other incentives that may be available. Stoel Rives is a Chambers-rated leader in renewable energy law.
Moderator:
Edward Einowski, Partner, STOEL RIVES LLP
Panelists:
Erica Egan, Senior Vice President, Corporate Finance, HELABA
LANDESBANK HESSEN-THURINGEN
Gregory Jenner, Partner, STOEL RIVES LLP
Kevin Pearson, Partner, STOEL RIVES LLP
Gary Barnum, Partner, STOEL RIVES LLP
Registration: http://www.infocastinc.com/index.php/conference/287
NYPA Receives 11 Notices of Intent to Bid for Offshore Wind Projects
The New York Power Authority stated today that it has received eleven (11) Notices of Intent to Bid into its RFP for offshore wind projects in Lakes Erie and Ontario. Formal proposals are due June 1. For more information, see my previous blog entry on NYPA's plans.
Department of Energy, Department of the Interior, and Army Corps of Engineers Sign Memorandum of Understanding for Hydropower
On March 24, 2010, three federal agencies announced a Memorandum of Understanding for Hydropower (the “MOU”) that impacts developers of traditional hydropower, hydrokinetic, pumped storage, and small-scale hydropower facilities. The Department of Energy (“DOE”), the Department of the Interior (“DOI”), and the Department of the Army, through the U.S. Army Corps of Engineers (“USACE”) (collectively, the “Agencies”), signed the MOU to "meet the Nation’s needs for reliable, affordable, and environmentally sustainable hydropower by building a long-term working relationship, prioritizing similar goals, and aligning ongoing and future renewable energy development efforts" between the agencies. The MOU comes at a time when industry representatives and eleven U.S. Senators are requesting that DOE support a $200 million appropriations request for the advancement of both conventional and advanced waterpower technologies.
In this “new approach to hydropower,” the Agencies intend to focus their collective efforts on advancing sustainable, low-impact, and small hydropower projects and promoting the goal of energy efficiency through water conservation or improved water management. Operating under the MOU, the Agencies will work together to advance four primary objectives:
- Support the maintenance and sustainable optimization of existing Federal and non-Federal hydropower projects;
- Elevate the goal of increased hydropower generation as a priority of each Agency to the extent permitted by their respective statutory authorities;
- Promote energy efficiency; and
- Ensure that new hydropower generation is implemented in a sustainable manner.
For more information on the MOU, including potential next steps for the Agencies, read the Energy Law Alert by Stoel Rives attorneys Cherise Oram, Michael O'Connell, and Chad Marriott posted here.
If you would like to sign up to receive our Energy Law Alerts when they are released, click here.
Colorado Increases its Renewable Energy Standard to 30% by 2020
From our colleague Adam Walters:
In February we blogged about Colorado HB-10 1001, a bill then pending in the Colorado legislature that would increase Colorado’s Renewable Energy Standard (RES) from 20% to 30% by 2020. The Democrat-sponsored bill was passed by the legislature on March 11 on a party line vote and yesterday it was signed into law by Colorado Governor Bill Ritter with great fanfare.
With the passage of this law Colorado now has one of the most ambitious RES’s in the country, and second only to California’s 30% requirement.
In addition to increasing the State’s RES, the law attempts to assist in job creation in the solar installation industry by placing greater emphasis on distributed generation (DG). For instance, the law requires Colorado utilities to spend 3% of its power purchases on distributed solar installations. The law also allows a utility to develop and own, as part of its rate base, up to 50% of the DG capacity it acquires from power purchase agreements and new construction if the cost is reasonably comparable to current market cost. The Public Utility Commission must also allow utilities the same cost recovery for the construction of new DG systems as allowed for new coal-fired facilities.
Tradable RECs Now Count Toward California's RPS
On Thursday March 11, 2010, the California Public Utility Commission (the "CPUC") created a market for tradable renewable energy credits ("TRECs") in the state. That's big news. In its 149-page decision, the CPUC stated that investor-owned utilities ("IOUs"), energy service providers, and community choice aggregators may now use TRECs to comply with California's ambitious renewable portfolio standard ("RPS"). These entities are now permitted to purchase a portion of their RPS compliance from generation sources other than those they own (e.g., distributed solar generation facilities within the state and certain out-of-state facilities).
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Conservation Advocacy Group Files Lawsuit to Force ESA Decisions on Dozens of Pacific Northwest Species
Last month, the Center for Biological Diversity (CBD) filed a lawsuit in the U.S. District Court for the District of Oregon alleging that the U.S. Fish and Wildlife Service violated the Endangered Species Act (ESA) by failing to take action on a number of listing petitions.
When a listing is petitioned, the Fish and Wildlife Service has 90 days to determine whether action may be warranted and then 12 months to issue it's finding.
The CBD’s lawsuit alleges that the Service has failed to issue 90-day and 12-month findings, for dozens of northwest species in violation of the ESA.
Stoel Rives attorney Ryan Steen issued a law alert exploring the significant implications surrounding these suits and the potential ESA listings.
Treasury Creates Safe Harbor for Smart Grid Investment Grants
Yesterday, the Energy and Treasury Departments jointly issued guidance regarding the federal income tax treatment of Smart Grid Investment Grant payments received pursuant to the American Recovery and Reinvestment Act (ARRA).
The guidance, which was issued as Revenue Procedure 2010-20, generally provides that a corporation receiving a specified grant will not recognize taxable income upon receipt of the grant, but will be required to reduce the tax basis of its assets by the amount of the grant.
Stoel Rives issued a law alert today regarding this guidance, further exploring what the guidance addresses, and notably, does not address.
National Hydropower Association Regional Meeting Underway in Juneau
Mary Jo Miller from our Portland office and Jonn Kauffman of our Anchorage office are in Juneau today and tomorrow attending the National Hydropower Association's Regional meeting, where Mary Jo is participating on a panel discussing funding mechanisms available for building hydropower projects. Mary Jo will present a case study describing the various loan, grant, and tax incentive funds used by one of our clients, the Central Oregon Irrigation District, to replace its existing porous open irrigation canal with an underground steel pipe combined with a 5MW hydropower system. The project will conserve water supply, increase river flow and water quality for local fish and wildlife species, and generate clean power for the local community. COID accessed eight different sources of funding to make this project a reality. Mary Jo's case study presentation is available here.
DOE Announces Upcoming Funding for Marine Hydrokinetics
Good news for marine hydrokinetics! On Wednesday, the U.S. Department of Energy ( the "DOE") issued a Notice of Intent announcing that its Wind and Hydropower Technologies Program will publish a Funding Opportunity Announcement ("FOA") for hydrokinetic technology development no later than March 31, 2010. This announcement comes just six months after the DOE awarded $14.6 million to 22 advanced water power projects designed to accelerate the commercial viability, market acceptance, and environmental performance of these technologies. Stoel Rives would like to congratulate Pacific Energy Ventures and Ocean Power Technologies for receiving two of those awards.
The FOA, called the "Marine and Hydrokinetic Technology Readiness Advancement Initiative," will solicit applications from industry-led partnerships that want to develop marine and hydrokinetic ("MHK") technologies at all levels of industry maturity. However, unlike past rounds of funding, this time the DOE will be using MHK-specific technology readiness levels ("TRLs") to assess system and component maturity. Preliminary definitions for the nine different proposed TRLs are included in the Notice of Intent. The DOE will direct funding in two areas using the new TRLs:
- Concept Development- Funding in this area will focus on projects seeking to advance a novel concept from TRL 1-3 ("Discovery/Concept Definition") to TRL 4 ("Proof of Concept"). By funding these projects, the DOE hopes to stimulate technology breaktroughs.
- Technology Readiness Level Advancement- Funding in this area will be directed to projects focused on operational readiness. Recipients will have established a proof of concept already and are moving toward laboratory or test facility validation of scale models, open water tests, operational verification, and commercial application.
Developers should begin assembling their teams immediately because the DOE anticipates a short application deadline once the FOA is announced. Remember that each applicant must be registered with FedConnect; each must have a Dun and Bradstreet Data Universal Numbering System number (a "DUNS number"), and each must be registered with the Central Contractor Registry.
Virginia Jumping in to Offshore Wind
In late February, the Associated Press reported that the Minerals Management Service received proposals from two Virginia companies for leases on the outer continental shelf to develop offshore wind farms. Apex Wind Energy Inc. is proposing to lease 116,000 acres for an undetermined number of wind turbines with the potential to generate up to 1,500 megawatts of power, and Seawind Renewable Energy Corp. envisions building 240 turbines to generate enough power for more than 250,000 homes annually, according to a company statement.
Both wind farms would be located 12 miles off of Virginia Beach.
The Virginia Offshore Wind Coalition estimates the development of a wind power hub in Virginia has the potential to become an $80 billion industry creating more than 10,000 jobs. Coalition members include the Cities of Virginia Beach and Norfolk, Apex Offshore Wind, AREVA, BAE Systems Ship Repair, Colonna’s Shipyard, Dominion Virginia Power, Earl Energy, Fugro Atlantic, Old Dominion Electric Cooperative, Science Applications International Corporation, Seawind Renewable Energy Corporation, Weeks Marine and W. F. Magann.
RFP for Renewable Resources.
NV Energy issued its Spring 2010 Request for Proposals seeking new renewable resources. NV Energy hopes to use the RFP to meet its RPS requirement of serving 12% of retail load with renewable energy in 2010. Bidders should also be aware that NV Energy's non-refundable bid deposits have changed: projects 10 MW of larger must submit a $10,000 deposit ($7,500 if the same facility was bid into the 2009 RFP); projects under 10 MW must submit a $5,000 deposit ($3,500 if the same project was bid into the 2009 RFP). Responses to the RFP are due April 16.
Details regarding NV Energy's Spring 2010 RFP can be found by clicking here.
Proposed Legislation to Limit ITC Grants for Renewable Projects
Proposed legislation in the Senate would greatly limit the effectiveness of the grant in lieu of tax credits for renewable energy projects under section 1603 of the American Recovery and Reinvestment Act.
The section 1603 grant currently applies to renewable energy projects, such as wind, solar, geothermal and biomass, that are placed in service before 2011 or for which construction begins in 2009 or 2010 (and that are placed in service by certain dates). In its current form, if a project qualifies for the grant, the Treasury Department is required to pay the grant.
Expressing concern that a significant portion of the grants paid so far have gone to non-U.S. companies, Senator Charles Schumer (NY) and three other Democratic senators have sponsored a bill that would make payment of the grant subject to the discretion of the Treasury Department. It also would make the grant subject to the Buy American requirements of the stimulus bill, and would require that Treasury conduct an analysis of the "domestic job preservation and creation provided by" a project for which a grant application is submitted.
Various trade associations involved in renewable energy (such as AWEA, GEA and SEIA) are taking immediate action to register their opposition. Their focus will be on the incorrect assumptions underlying the proposal (for example, that it does not create U.S. jobs) and that, if enacted, it likely would destroy the effectiveness of the program.
We encourage our readers to register their strong opposition with their members of Congress and with the trade associations with which they are associated. The more opposition that is registered, and the longer the proposal drags out, the less likely it is to be enacted.
Read the March 4, 2010 Stoel Rives Law Alert on this proposed legislation.
SHOW ME THE MONEY: NEW ARPA-E FUNDS
DOE issued three Funding Opportunity Announcements (FOAs) on March 2 that offer $100 million in American Recovery and Reinvestment Act funding for the third round of its Advanced Research Projects Agency - Energy (ARPA-E) program. The FOAs were announced at the first ARPA-E summit in Washington, D.C., and focus on innovations in three areas of technology: grid storage, power converters, and cooling systems for buildings. The goal is to promote U.S. leadership in the emerging global market for these advanced energy technologies, while cutting greenhouse gas emissions and reducing U.S. electrical consumption by as much as 30%.
The FOAs can be found at https://arpa-e-foa.energy.gov/Default.aspx
Michigan GLOW Council Issues Legislative Recommendations for Offshore Wind
Michigan's Great Lakes Wind Council (GLOW Council), an advisory body within the Michigan Department of Energy, Labor & Economic Growth to examine issues and make recommendations related to offshore wind development in Michigan, has issued recommendations for a regulatory framework for offshore wind in Michigan's Great Lakes. These recommendations follow the GLOW Council's September 1, 2009 report (see previous blog entry), which contained proposed steps forward to developing an offshore wind industry in Michigan.
The recommendations, dated March 3, 2010, include a process that the Council recommends for inclusion in any bill introduced into the legislature to regulate offshore wind energy development in the Great Lakes, as well as recommendations for changes to transmission siting laws when the transmission relates to service of an offshore wind energy development.
White Paper Explains New Advanced Renewable Fuel Standard/RFS2
My colleague Graham Noyes and Clayton McMartin of Clean Fuels Clearinghouse recently published a white paper on the massive and staggeringly complex revision of the federal Advanced Fuel Standard (RFS) issued by the U.S. Environmental Protection Agency on February 3, 2010. Graham and Clayton describe how this second generation renewable fuel initiative (RFS2) will bring industry and government together in ways never before experienced by the fuels industry.
With a view to helping market participants develop comprehensive cost/benefit and compliance strategies, Graham and Clayton structure their discussion according to the following key topics:
- Legal background and new statutory requirements of RFS2;
- Compliance implications of updates to the Renewable Identification Numbers (“RINS”) process; and
- Issues important to particular market participants, including producer obligations, new fuel pathways, importer issues and RIN trading economics.
Download a free copy of the Renewable Fuel Standard/RFS2 White Paper (PDF)
186 More Species to be Protected by the Migratory Bird Treaty Act (MBTA)
My colleagues Greg Corbin and Eric Martin report on an important development under the Migratory Bird Treaty Act that may affect the siting and permitting of wind projects
Yesterday the U.S. Fish and Wildlife Service (FWS) announced the addition of 186 migratory birds to its list of species protected by the MBTA. Effective at the end of this month, this is the first update to the MBTA list in 25 years and will bring the total number of species receiving federal protection under the MBTA to over 1,000. Because the MBTA protects the vast majority of birds in the country, it covers many species not covered by the Endangered Species Act (ESA) or other laws.
Similar in some respects to the ESA, the MBTA prohibits the “take” (e.g., wounding or killing) of migratory birds. However, unlike the ESA, the MBTA does not have a routine mechanism for permitting incidental take of migratory birds. Accordingly, there is no way to be completely free of legal liability if a wind project results in the take of a migratory bird. Project developers, though, can seek assurances from the FWS that it will exercise its enforcement discretion if the project developer implements measures to protect migratory birds, such those that might be contained in an Avian & Bat Protection Plan. The measures necessary to avoid or mitigate impacts to migratory birds are project specific and always result in some additional cost, whether through changes to project layout and operation, or supplying mitigation funds.
In light of this newly expanded list of species protected by the MBTA, developers and operators of wind project would be well advised to review their strategy for minimizing the risk of prosecution under the MBTA.
The complete list of birds that will be protected by the MBTA is available at http://www.fws.gov/migratorybirds/.
